Blue Dog letter to CFPB addressing overly burdensome financial regulations
May 10, 2011
Today members of the Blue Dog Coalition, under the leadership of Congressman Ben Chandler (KY-06) and Congressman Tim Holden (PA-17), sent a letter to Dr. Elizabeth Warren, Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau, addressing overly burdensome financial regulations that slow job growth and fail to improve consumer protections. Following is the text of the letter.
Dear Dr. Warren:
On January 18, 2011, President Obama issued an executive order calling on every federal agency to review their regulations to ensure they "promote predictability and reduce uncertainty," "take into account benefits and costs," and "identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends." As members of the Blue Dog Coalition and the Task Force on Oversight and Regulatory Review, we applaud this initial step and want to work with the Administration to aggressively cut red tape and remove outdated regulations that slow job creation.
One of the new duties of the Consumer Financial Protection Bureau is to combine consumer disclosures under the Real Estate Settlement Practices Act (RESPA) and Truth in Lending Act (TILA) into one form. Given this new requirement, we want to bring to your attention a concern that has hindered some of our banks from meeting the needs of the American consumers.
As RESPA and TILA continue to expand and overlap, banks have been left with the nearly impossible job of determining how to remain in compliance. Rather than increasing transparency and security, this process only makes closing loans more difficult and confusing for the consumer. For example, two years ago, banks were forced to begin using new disclosure forms that required vertical lines to delineate columns where lines had not previously been. Bank IT departments and vendors could not create the lines fast enough and instead used vertical lines of asterisks to clarify column breaks. Regulators charged banks with being in violation. This seemingly simple matter continues to cause problems for banks, yet it does not improve consumer protections.
As federal regulators begin to enact the multitude of regulations included in the Wall Street Reform and Consumer Protection Act, giving proper consideration to existing rules is crucial to a healthy financial industry. We urge you to take the time to re-examine burdensome regulations as part of your efforts to protect consumers.
The Blue Dog Coalition is committed to working with you and all key stakeholders to monitor legislative implementation efforts, identify overly burdensome regulations, and seek to modify rules problematic to job creation.
Sincerely,
Rep. Ben Chandler (KY-06), Chair, Blue Dog Task Force on Oversight and Regulatory Review
Rep. Tim Holden (PA-17), Vice-Chair, Blue Dog Task Force on Oversight and Regulatory Review
Rep. John Barrow (GA-12)
Rep. Sanford Bishop (GA-02)
Rep. Dan Boren (OK-02)
Rep. Leonard Boswell (IA-03)
Rep. Dennis Cardoza (CA-18)
Rep. Jim Costa (CA-20)
Rep. Jim Matheson (UT-02)
Rep. Collin Peterson (MN-07)
Rep. Mike Ross (AR-04)
Rep. Loretta Sanchez (CA-47)
Rep. Kurt Schrader (OR-05)
Rep. David Scott (GA-13)
Rep. Heath Shuler (NC-11)
Rep. Mike Thompson (CA-01)
Click here for a PDF version of the letter.
Dear Dr. Warren:
On January 18, 2011, President Obama issued an executive order calling on every federal agency to review their regulations to ensure they "promote predictability and reduce uncertainty," "take into account benefits and costs," and "identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends." As members of the Blue Dog Coalition and the Task Force on Oversight and Regulatory Review, we applaud this initial step and want to work with the Administration to aggressively cut red tape and remove outdated regulations that slow job creation.
One of the new duties of the Consumer Financial Protection Bureau is to combine consumer disclosures under the Real Estate Settlement Practices Act (RESPA) and Truth in Lending Act (TILA) into one form. Given this new requirement, we want to bring to your attention a concern that has hindered some of our banks from meeting the needs of the American consumers.
As RESPA and TILA continue to expand and overlap, banks have been left with the nearly impossible job of determining how to remain in compliance. Rather than increasing transparency and security, this process only makes closing loans more difficult and confusing for the consumer. For example, two years ago, banks were forced to begin using new disclosure forms that required vertical lines to delineate columns where lines had not previously been. Bank IT departments and vendors could not create the lines fast enough and instead used vertical lines of asterisks to clarify column breaks. Regulators charged banks with being in violation. This seemingly simple matter continues to cause problems for banks, yet it does not improve consumer protections.
As federal regulators begin to enact the multitude of regulations included in the Wall Street Reform and Consumer Protection Act, giving proper consideration to existing rules is crucial to a healthy financial industry. We urge you to take the time to re-examine burdensome regulations as part of your efforts to protect consumers.
The Blue Dog Coalition is committed to working with you and all key stakeholders to monitor legislative implementation efforts, identify overly burdensome regulations, and seek to modify rules problematic to job creation.
Sincerely,
Rep. Ben Chandler (KY-06), Chair, Blue Dog Task Force on Oversight and Regulatory Review
Rep. Tim Holden (PA-17), Vice-Chair, Blue Dog Task Force on Oversight and Regulatory Review
Rep. John Barrow (GA-12)
Rep. Sanford Bishop (GA-02)
Rep. Dan Boren (OK-02)
Rep. Leonard Boswell (IA-03)
Rep. Dennis Cardoza (CA-18)
Rep. Jim Costa (CA-20)
Rep. Jim Matheson (UT-02)
Rep. Collin Peterson (MN-07)
Rep. Mike Ross (AR-04)
Rep. Loretta Sanchez (CA-47)
Rep. Kurt Schrader (OR-05)
Rep. David Scott (GA-13)
Rep. Heath Shuler (NC-11)
Rep. Mike Thompson (CA-01)
Click here for a PDF version of the letter.
The Task Force on Oversight and Regulatory Review is responsible for taking a look at the nearly 8,000 regulations issued annually by the federal government and for analyzing these new rules to ensure Congressional intent is appropriately followed. Under the leadership of Chair Ben Chandler (KY-06) and Vice-Chair Tim Holden (PA-17), the Task Force monitors implementation efforts, identifies overly burdensome regulations and seeks to modify rules problematic to job creation.
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